How A Change in Procurement Strategy Transformed A Hotel & Visitor Centre Attraction

Located on the river Clyde in South Lanarkshire and listed as one of six UNESCO World Heritage Sites in Scotland, the historic New Lanark cotton mill village has become a major tourist attraction in its own right.

Operating as a subsidiary of the New Lanark Charitable Trust, the hotel and visitor centre reinvests all its profits to help fund the management, restoration and ongoing preservation of the heritage site. In a specially produced interview for CateringScotland.com, the hotel’s general manager, John Stirrat (pictured left), discusses his focus on procurement and how this strategy is reaping rewards – both financial and in efficiency savings – for the organisation as a whole…

‘Over 150,000 people pass through the doors each week here and we want them to enjoy their visit from start to finish,’ explains John. ‘I was spending much of my time negotiating with various suppliers and managing tactical details such as deliveries or line item pricing, which was proving a significant diversion from our core remit of delivering a quality experience across all parts of the organisation.

‘As a consequence, I made the decision to identify a purchasing specialist who would support us in the procurement of food and beverage for our catering facilities.’

Selecting Pelican Procurement Services as their preferred partner, he was impressed with their approach: ‘We work with any supplier – large or small, local or national – and I really liked what I was seeing with Pelican,’ he continues. ‘They are open, transparent and innovative – far more than others we have encountered.’

Launching their trading relationship November 2016, it was agreed that the Pelican team would manage the Trust’s food, drink and non-food procurement: ‘Much to the delight of our board of trustees, the results have been phenomenal,’ beams John. ‘Over £40,000-worth of savings in the last 18 months alone and the advantages haven’t stop there; price management has also been a big benefit.

Pelican Procurement handles the F&B sourcing for the New Lanark Mill hotel and visitor centre

‘Previously, the heads of department were responsible for their own budgets and yet prices would rise unexpectedly and we wouldn’t always be immediately aware of any such changes. Ultimately we have to make sure we are receiving value for money from our suppliers, and Pelican’s industry knowledge means they work on our behalf to mitigate rises wherever possible.’

By way of example, with prices rising significantly for milk and butter in 2017, John and his New Lanark Trust colleagues took the decision to divide the products so that one was sourced directly from a dairy, while the other was procured through a national supplier: ‘This set-up ensured our milk was purchased with the right margin for us,’ he explains. ‘Then, as prices started to come back down, Pelican was able to renegotiate accordingly.’

Additionally, John has also discovered the arrangement makes it considerably easier from a management perspective: ‘As we are part of the charity, many of our systems and processes have been in place for years and the level of administration required to process all of the orders and fulfillments was enormous.

‘With the online Pi system,’ explains John, ‘each head of department can order what they need and it is instantly reconciled. All I have to do is tick a box at the end of each month and an invoice is paid.

‘To be honest, I used to dread the end-of-month supplier invoice payments; I would spend a full day manually checking everything and then the office would spend a couple of days typing everything line by line into Sage. It was all so inefficient!

‘Now it’s all there as part of Pi, everything has already been checked by Pelican’s e-billing team and there’s one consolidated statement for all suppliers. It’s a doddle.’

And in addition to all this, Pelican provide a degree of value-added support that John hadn’t initially appreciated would be available as part of the overall service: ‘Recently we were in the middle of developing our visitor centre café and we wanted to expand the coffee offering,’ he explains. ‘Pelican drew up a schedule of what we were looking for and saved us a huge amount of time in the process. Five companies duly came in to present to us and while the final decision rested with me it was extremely useful to have a third party there.’

Likewise, John cites the importance of being able to re-tender if required, partly to demonstrate they are not being complacent with pricing and service levels: ‘To be able to move suppliers mid-contract is crucial if we need to. Financial savings are one thing, but having the assurance that suppliers are being well managed with no nasty pricing or supply surprises around the corner means I sleep much more soundly at night!’

For more information on how Pelican Procurement Services can help your business to simplify its administration burden, consolidate suppliers and ultimately save money, visit www.pelicanprocurement.co.uk